Standards can be used in a job-order costing system if the products manufactured are similar in nature.

Question

Quizplus · Accepted Answer

Standards can be used in job-order costing if the products being manufactured are similar in nature. This is because standards represent a predetermined level of cost or performance, and are usually established for products that are expected to be produced repeatedly. In a job-order costing system, each product is typically unique and different from the others, which makes it difficult to use standard costs. However, if the products being manufactured are similar in nature (for example, different models of the same product line), then standard costs can be used to estimate the costs of manufacturing each unit.

Standards Can Be Used in a Job-Order Costing System If